Low Medi-Cal payments could weaken expanded coverage for undocumented children

Primary-care providers say an expansion of Medi-Cal coverage to undocumented children in California will help them serve a population that is flooding the system. But some hospital groups point to the low Medi-Cal payment rates as limiting the value of expansion.

Gov. Jerry Brown and legislative leaders Tuesday announced the move to cover children under 19 in a budget deal.

An estimated 170,000 kids could qualify for the expansion. The coverage to qualifying immigrant children would begin in May 2016, costing $40 million in the new budget and an estimated $132 million in annual taxpayer funding after that. Currently, the state only offers immigrants emergency and pregnancy-related services.

The policy change means that children will be able to take advantage of preventive services and not have to wait until a medical emergency to seek care.

“Some parents may delay seeking care for their child hoping they'll get better, because they are nervous they'll get a big bill at the hospital, or at the possibility they'll be reported" to Immigration and Customs Enforcement, said Janet Coffman, associate professor of health policy at the University of California at San Francisco.

“With this expansion in coverage, (community health centers) are excited for the opportunity to better coordinate our young people's care, connect them to specialty services we know they need, and provide them with a more integrated care experience,” said Beth Malinowski, assistant director of policy at the California Primary Care Association.

Prior to the budget deal, limited coverage options for undocumented children in California were funded in certain counties or through a national emergency provisional Medicaid policy that subsidizes some emergency care.

The additional coverage could be a godsend for some practices, according to Dr. Wanda Filer, president-elect of the American Academy of Family Physicians.

“It's no secret that there are primary-care practices that are struggling financially, so anything that can be done to help to stabilize these practices, helps to not only ensure access to care for these individuals, but everybody,” Filer said.

Others are unclear what financial benefit the budget proposal could have on providers.

Hospitals could get some sort of reimbursement from the emergency Medicaid policy for treating undocumented residents and they could also pull down reimbursement from Medicaid disproportionate-share hospital funds and other pools of supplemental income. That, in theory could reimburse higher than traditional Medicaid, according to Shawn Gremminger, director of legislative affairs at America's Essential Hospitals which represents safety net providers. However, he said it would take a formal study to determine how often this is the case.

In California, Medi-Cal rates paid to providers are so low that there's a shortage of physicians who accept Medi-Cal, according to Jan Emerson-Shea, vice president of external affairs at the California Hospital Association.

California currently ranks 48th in the nation in how much it pays hospitals, doctors and other healthcare providers for treating Medi-Cal patients, according to the Kaiser Family Foundation.

The access issue has only increased as expansion under the Affordable Care Act has seen enrollment in the program grow from around 9 million to 12 million, Shea notes.

The plan to offer Medi-Cal coverage to children living in California is expected to easily win approval this week from a Democratic-controlled Legislature.

Democratic lawmakers say they plan to continue to push for universal health coverage that would cover all-low income residents, regardless of their legal status or age.

"For me, a win will be (when) we actually have truly health for all," said state Sen. Ricardo Lara, a Democrat and the author of SB4, which seeks to extend health coverage to adult immigrants who are in the country illegally.